Free Version at www.larrysherrod.

com Revision: 001

Standard Operating Procedure:

Cost Accountant User Guide
Release Date: 10/31/2006

Oracle Cost Management

User Workbook Cost Management Oracle Cost Management

Confidential

Tree Town USA

Revised 10/31/2006

Free Version at www.larrysherrod.com Revision: 001

Standard Operating Procedure:

Cost Accountant User Guide
Release Date: 10/31/2006

COST ACCOUNTANTS DAILY TASKS:....................................................................3 CHANGING COSTS:....................................................................................................10 COST REPORTS:..........................................................................................................12 Inventory Value Report: ..........................................................................................12 EVALUATING & ANALYZING COST DATA..........................................................15 Inventory Material Cost.............................................................................................15 Labor & Overhead Costs...........................................................................................18

Confidential

Tree Town USA

Revised 10/31/2006

Free Version at www.larrysherrod.com Revision: 001

Standard Operating Procedure:

Cost Accountant User Guide
Release Date: 10/31/2006

COST ACCOUNTANTS DAILY TASKS:
One of the cost accountants daily tasks should include looking for any zero cost items. The cost accountant should strive to keep this list as short as possible. As we know, most items have a cost associated with them. We are trying to find out where items were created, but no cost was associated with that item. This is done in Oracle by following the navigation path: Cost Management>item costs>item costs. The following screen should appear. Enter ‘Frozen’ as the cost type and make sure to check the ‘Zero Cost Items Only’ box. Click the ‘Find’ button once the data has been entered.

The screen below should appear.

For each item, click the ‘Open’ button. The screen at the beginning of the following page should display.

Confidential

Tree Town USA

Revised 10/31/2006

Free Version at www.larrysherrod.com Revision: 001

Standard Operating Procedure:

Cost Accountant User Guide
Release Date: 10/31/2006

Go through this screen to make sure that the last PO Price is 0. If it is above 0, it means the item is being bought. Also, check the ‘Make/Buy’ field. If it is a ‘Make’ item, why is there no BOM that rolls up into a cost. If it is a ‘Buy’ item, why is there no cost associated with it.

From here, the cost accountant would need to do research. They would need to contact the person who setup the item, and inquire why that item has no standard cost. Was the item bought and the person forgot to enter the cost? If there is a PO Price present, then why doesn’t the item have a standard cost? As stated earlier, one of the cost accountants main duties is to limit the size of the zero-cost items list. Once the research has been done, appropriate action should be taken. Another daily task for a cost accountant is to run the ‘Inventory Value Report.’ This report is run to identify items that have negative quantities. The navigation path to get to this report is Inventory>Reports>All.

Confidential

Tree Town USA

Revised 10/31/2006

Free Version at www.larrysherrod.com Revision: 001

Standard Operating Procedure:

Cost Accountant User Guide
Release Date: 10/31/2006

Click on the ‘Submit a New Request’ button. Select a ‘Single Request’ and click on the ‘OK’ button.

The screen below should appear.

Click on the List of Values, and select the ‘Inventory Value Report.’ Upon selecting this report, a parameters screen will display. This screen is shown below.

Change the ‘Negative Quantities Only’ field to Yes.
(You could also leave the ‘Negative Quantities Only’ field at No, and change the ‘Display Zero Costs Only’ field to Yes.)

Once you’ve entered your parameter data, click on the ‘OK’ button.

Confidential

Tree Town USA

Revised 10/31/2006

Free Version at www.larrysherrod.com Revision: 001

Standard Operating Procedure:

Cost Accountant User Guide
Release Date: 10/31/2006 Click on the ‘Submit’ button to run the report. Click on the ‘No’ button when prompted to submit another request, unless you have another report you wish to run.

Go to the Menu bar, and select the ‘View’ option. From the ‘View’ option, select ‘Requests.’ The screen below should appear. Click on the ‘Find’ button.

Confidential

Tree Town USA

Revised 10/31/2006

Free Version at www.larrysherrod.com Revision: 001

Standard Operating Procedure:

Cost Accountant User Guide
Release Date: 10/31/2006 In this screen, you can see that the report is in a phase of ‘Running’ and the status is ‘Normal’. Once the report completes, it will show the same phase and status as the report below it.

The report will appear in the lines of the screen below.

You may need to click on the ‘Refresh Data’ button in order to get the report to complete. Once the report has completed, click on the ‘View Output’ button. The screen below and to the right appears.

Confidential

Tree Town USA

Revised 10/31/2006

Free Version at www.larrysherrod.com Revision: 001

Standard Operating Procedure:

Cost Accountant User Guide
Release Date: 10/31/2006

From here, you need to click on the ‘Tools’ menu option. Select the ‘Copy File…’ option. The report is formatted to a more “reader-friendly” view.

The next page shows what this report would look like once all the aforementioned steps are followed.

Confidential

Tree Town USA

Revised 10/31/2006

Free Version at www.larrysherrod.com Revision: 001

Standard Operating Procedure:

Cost Accountant User Guide
Release Date: 10/31/2006

Confidential

Tree Town USA

Revised 10/31/2006

Free Version at www.larrysherrod.com Revision: 001

Standard Operating Procedure:

Cost Accountant User Guide
Release Date: 10/31/2006

CHANGING COSTS:
TreeTown USA is only using Standard Costing. Under standard costing, predetermined costs are used for valuing inventory and for charging material, resource, overhead, period close and job close and schedule complete transactions. This section deals with how to change frozen and pending item costs. This is done by following the standard cost update procedure. The standard cost update procedure enables you to define and rollup pending costs and then update pending costs to the Frozen standard cost type. The only way to change a frozen cost is to change the pending cost associated with it, and then perform a standard cost update. Updating pending costs to frozen standard costs does the following: (1) Updates the existing standard costs with the costs created in the new cost type and creates the resulting adjustment accounting entry. The cost update revalues discrete job balances, creates accounting adjustments, and prints the adjustments along with the new job values in its report. (2) Creates item cost history. (3) Prints the Inventory, Intransit, and WIP Standard Cost Adjustment reports that detail the valuation changes in your inventory due to the change in the standard costs. You can only update standard costs from the master costing organization, which must use standard costing. The standard cost update is a batch process that can run while you perform normal transactions. Doing so delays accounting transactions until the cost update is complete. However, if the period close, job close, or general ledger transfer processes are running, the standard cost update is delayed until they are complete. Attention: Cost management does NOT update the standard costs of those items for which you do not define a cost. The standard cost is updated to zero only if you define a zero cost for the item. The navigation path used in order to update pending costs to Frozen standard costs is Cost Management>Item Costs>Standard Cost Update>Update Costs. Upon opening the Update Costs option, you will be directed to a parameters screen for the Update Standard Costs report. This screen is shown at the beginning of the next page.

Confidential

Tree Town USA

Revised 10/31/2006

Free Version at www.larrysherrod.com Revision: 001

Standard Operating Procedure:

Cost Accountant User Guide
Release Date: 10/31/2006 Enter all the required fields. Those being Cost Type, Description, Item Range, and Sort Option. When you click on the Cost Type list of values, you will be shown the screen below.

Choose the ‘Pending’ cost type. Upon choosing the ‘Pending’ cost type, you will be directed to the screen below. This is the Inventory Adjustment Account screen. Enter the Company, Farm, Cost Center, and Account, of the standard costs that you would like to update. This account is used to collect the changes in value to each item, and to automatically generate transactions that adjust your inventory accounts. Your inventory is adjusted by subinventory and elemental cost account. Your discrete WIP is adjusted by job and cost element account. The WIP accounting class defines the adjustment account for your discrete jobs. After you have entered all of this data, you will be redirected back to the parameters screen. Enter the remaining required fields. When you click on the list of values for the Update Option field, the following screen will display. Choose the update option you wish to use.

Confidential

Tree Town USA

Revised 10/31/2006

Free Version at www.larrysherrod.com Revision: 001

Standard Operating Procedure:

Cost Accountant User Guide
Release Date: 10/31/2006

Once you have selected this, you will be redirected to the screen below. Enter the low and high range for the items you wish to update.

Once you’ve completed these fields, enter any additional fields that you wish to include on the parameters screen. If satisfied, click on the ‘OK’ button on the parameters screen. You should now see the screen below.

Click on the ‘Submit’ button to run the report. From here, follow the same procedures as described earlier in order to view the report.

COST REPORTS:
Reports will be essential tools for the cost accountant. Two reports that will be frequently used will be the ‘Inventory Value Report’ as well as the ‘WIP Value Report.’ The Inventory Value report is used to show quantity, valuation, and detailed item information for the subinventories you specify. It shows how much value is tied up in different types of inventory. The WIP Value report details WIP inventory as of a particular accounting period. Oracle lists the value of discrete jobs and repetitive schedules for the period specified, lists the ending balance for each discrete job and repetitive schedule in a particular accounting class, and subtotals by the accounting class. In addition, the system summarizes each accounting class by cost element and lists a subtotal for each type of accounting class. For example, your can view your WIP inventory value for all standard discrete jobs.

Inventory Value Report:
The navigation path to get to this report is Inventory>Reports>All.

Confidential

Tree Town USA

Revised 10/31/2006

Free Version at www.larrysherrod.com Revision: 001

Standard Operating Procedure:

Cost Accountant User Guide
Release Date: 10/31/2006

Click on the ‘OK’ button to submit a single request.

Click on the list of values box and select the Inventory Value Report and click ‘OK.’

Upon clicking the ‘OK’ button, the screen to the left will appear. Enter the parameters you would like to see in the report. Once satisfied with this data, click on the ‘OK’ button. The screen below will appear.

Confidential

Tree Town USA

Revised 10/31/2006

Free Version at www.larrysherrod.com Revision: 001

Standard Operating Procedure:

Cost Accountant User Guide
Release Date: 10/31/2006

Click on the ‘Submit’ button. Your report will run. To view your report, use the same procedures that were described earlier in this document.

WIP Value Report: The procedures with this report are many of the same that were used with the previous report. The navigation path is Work in Process>Reports. Select a single request, and click on the ‘OK’ button.

Select the ‘WIP Value Report’ from the list of values. Once you have selected this report, you will be directed to the parameters screen. This is shown on the following page. Enter the parameters for the report. The two fields that are required are ‘Period’ and ‘Exchange Rate.’ Once you have entered your data, click on the ‘OK’ button.

Confidential

Tree Town USA

Revised 10/31/2006

Free Version at www.larrysherrod.com Revision: 001

Standard Operating Procedure:

Cost Accountant User Guide
Release Date: 10/31/2006

The screen below should appear. Click on the ‘Submit’ button to run your report.

From here, follow the same procedures mentioned earlier in this document to view your report.

EVALUATING & ANALYZING COST DATA
Inventory Material Cost
A cost accountant would analyze Inventory Material Costs in many of the same ways as they analyzed WIP and Inventory values. They would run an Item Costs Report, setting the parameters to reveal the data that they were looking for. When would this report be Confidential Tree Town USA Revised 10/31/2006

Free Version at www.larrysherrod.com Revision: 001

Standard Operating Procedure:

Cost Accountant User Guide
Release Date: 10/31/2006

used? An example, is if someone says that inventory is overstated, the cost accountant would work back through the data. Some things that they may look for would be discrepancies in Unit of Measure, Quantity, a wrongly entered cost, or any combination of these. The Item Costs Report is a great report to sort through some of this data. The navigation path to get to this report is Inventory>Reports>Costs>Items. Click the ‘OK’ button to Submit a Single Request.

Click on the list of values and select the ‘Item Costs Report.’ Upon selecting it, you will be shown the parameters screen. Enter all required fields and any additional fields that you wish to include.

Confidential

Tree Town USA

Revised 10/31/2006

Free Version at www.larrysherrod.com Revision: 001

Standard Operating Procedure:

Cost Accountant User Guide
Release Date: 10/31/2006

When selecting the Cost Type, either ‘Frozen’ or ‘Pending’, you will be redirected to a screen that looks like the one below. Enter the low and high range of the items you wish to include. The last field that you are required to enter is Report Name. Choose the report that you wish to run. The screen below shows the options that are available. Once you’ve selected the appropriate report name, click on the ‘OK’ button. Click the ‘OK’ button on the parameters screen when you are satisfied with the data you have entered.

Confidential

Tree Town USA

Revised 10/31/2006

Free Version at www.larrysherrod.com Revision: 001

Standard Operating Procedure:

Cost Accountant User Guide
Release Date: 10/31/2006

Click the ‘Submit’ button to run the report. To view the report, repeat the same procedures that were discussed earlier in this document.

Labor & Overhead Costs
To analyze the labor and overhead costs, the cost accountant should run the WIP Value Report. This report breaks down labor and overhead that is associated with any given job and also shows a total of where the labor is being used. The navigation path for this report is Work in Process>Report. After selecting the ‘Report’ menu option, you will use the same steps you used to run and view other reports. Below, you see the parameters screen for this report. Set the parameters to your preferences for this report. Being that you want to analyze labor & overhead, set the parameters to include the data you need to see.

Some fields that may be of particular use for analyzing labor and overhead would be ‘Class Type’, ‘Job/Schedules From….To’, and ‘Assemblies From....To.’ Depending on the information you need, set the parameters to satisfy these needs.

Confidential

Tree Town USA

Revised 10/31/2006

Free Version at www.larrysherrod.com Revision: 001

Standard Operating Procedure:

Cost Accountant User Guide
Release Date: 10/31/2006

Confidential

Tree Town USA

Revised 10/31/2006